Chase Credit Card

[w81024]

I had a Chase credit card that I took out on a failed business. Unfortunately, because I bootstrapped the business, I was personally liable for the debt. Long story short, the date of last activity was August 1, 2010. In December 2013, I received a 1099C from Chase stating they were cancelling the debt and charging off the balance.

Recently, I've been working on cleaning up my credit report and noticed that Chase is reporting this account as bad debt, placed for collection, with a remaining outstanding balance. I've called Chase twice this month to try and get them to correct what they are reporting; however, they claim that the debt is being reported correctly and that they can continue reporting the full balance as being owed even though they've discharged the debt and issued me a 1099C.

Is this in fact true? Can Chase legally do this? Other debt that I've settled for less than full indicates it as being paid off for less than full on my credit report but the balance is still zero.

[myjourney]

Courtesy of Robert EG...Our very own

A charge-off is simply the creditor's reporting of an internal bookeeping measure they took to move the debt from a receivable asset to what they consider to have become an uncollectible debt, and thus receive a tax writeoff.  It does no excuse a penny of the debt, which remains fully collectible.

Sending a 1099c is a HUGE difference.  It is their legal statement to both the consumer and the IRS that they have excused/cancelled the debt, usually for the full amount.

That amount of the prior debt no longer exists, and the creditor is required to update the balance, usually to $0 if the entire debt was cancelled.

Payment of taxes is not the determining factor as to their requirement to update, it is their official reporting that they have cancelled the debt.

You can choose to dispute first, either by sending the furnisher a direct dispute or by sending the dispute to the CRA.

Probably a good idea to first show that you have exhausted your administrative remedies by disputing, and it will provide a formal statement that the furnisher has conducted a reasonable investigation, and if they verify, it would put into very question the reasonableness of their investigation.  Additional should they verify, file your complaint to the CFPB.  The only negative in first disputing is that it will result in a dispute flag posted to your CR, and thus temporarily removing certain information from your credit scoring.  If you are not in the immediate process of using your score for apps for new credit, that may not be a factor.

Looks like an open and shut case if they sent a formal 1099c.